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Council Reverses Course, Extends Ad Agency Contract

OCEAN CITY – The Mayor and City Council had a change in heart in its decision to shop around for an advertising agency this week, deciding instead to extend the incumbent’s contract while the city embarks on a strategic planning initiative.

Tourism Advisory Board (TAB) Chair Greg Shockley gave the Mayor and City Council an update on upcoming events during the fall season this week and upon conclusion made a request for the council to reconsider the town’s contract with MGH, which has been the town’s advertising agency for 10 years.

In August, the council voted 4-3, with Council members Joe Hall, Brent Ashley, Jim Hall and Margaret Pillas in favor, to not renew MGH’s contract but to conduct a Request For Proposal (RFP) process over the winter to select an advertising agency.

Tourism and Marketing Director Donna Abbott explained at that time that the current agreement with MGH commenced on Jan. 1, 2011 and was for a two-year period that ends Dec. 31, 2012. The agreement renews automatically for additional one-year periods unless terminated by either party with 120 days’ notice prior to the termination date.

Ocean City last conducted an agency review in 2009 and selected MGH to continue out of a field of several advertising agencies that submitted proposals. The agency’s current monthly fee is $22,958, averaging out to an annual expense of about $275,000.

“By extending that year, MGH stays in place, run this year out, and you’re allowed to do that RFP over that course of the year and you can get a better look at what’s out there and what’s available,” Shockley said, explaining TAB’s request. “My fear and TAB’s fear is that we get jammed up on Dec. 31 and we can’t make the best decision.”

Pillas immediately set a motion for the council to continue on the path to go out for bids for the town’s advertising agency and Joe Hall seconded the motion.

“I think it is prudent to go outside and look again after 10 years with the same guy and see if there is something out there and I think its sharpens the pencil in price to me. It is a business decision,” Council President Jim Hall said.

Councilman Doug Cymek said he doesn’t have a problem with placing an RFP on the town’s advertising company but is concerned over the timing as October approaches.

“This RFP process sounds like it is going to take 30 days to work through and we are going to have very little time to assess these people and make a decision by the first of the year,” he said.

Councilwoman Mary Knight looked at the process from a different perspective in that agencies that would place a proposal would be at a disadvantage at this point in time as the town prepares to begin a strategic planning initiative.

“We are putting the cart before the horse,” she said. “Everybody is going to be at a disadvantage because they are not going to have very valuable information that will help them respond to our bids and meet our needs for the next five years.”

City Manager David Recor received permission from the Mayor and City Council a couple of months ago to begin the strategic planning initiative, which is a process that will result in a vision statement with defined, value-based principles that describe the preferred future for the town with a 15-year planning horizon. Recor estimated the process to be completed by early spring.

Recor agreed with TAB in extending MGH’s contract for another year. He explained that the town is in the initial phases of the initiative as interviews with staff and council are being scheduled. Following the interviews and workshops, action plans will be put in place and the Mayor and City Council will develop legislative and management priorities.

“So all of this, specifically with the advertising agency, and wherever we want to go will tie directly to the five-year strategic plan, so I think this discussion is specifically related to the strategic plan and I think the recommendation is definitely appropriate,” he said.

Recor updated the council that MGH was notified at the end of August that its contract is due to expire and a draft of the RFP has been prepared for the council’s input at a future work session.

“There really is no need to rush the process just to meet a deadline, particularly when we are going through this significant initiative,” Recor said.

After hearing from Recor, Pillas and Joe Hall withdrew their motion to continue in the RFP process.

“Out of respect for my colleagues I will withdraw … but personally I think delaying it is a mistake,” Joe Hall said. “The agencies that are going to respond to the RFP are professional enough to try to tie this into the strategic plan.”

Cymek made a motion to extend the MGH contract one year and in all future contracts that the notice be 180 days to give adequate time to properly place the RFP process and the council voted 5-2 to approve with Joe Hall and Brent Ashley in opposition.

On Wednesday morning, MGH President Andy Malis said he was thrilled with the news of the council’s decision.

“We love working with Ocean City, we have been doing it a long time, and I am very personally invested in it … it is one client of the agency that I more involved with than any other, so it would have been sad if we weren’t going to continue,” he said.

Malis furthered that it is important to note that MGH has worked hard to build a relationship with Ocean City tourism department and business community and felt privileged to have TAB support the continuation of MGH’s contract.

“That’s important that the people closest to business have a strong say in it and I am happy that a couple of council members changed their vote so that we can continue to work together,” he said. “It is really good news.”

As far as MGH’s plans to be part of the RFP process at the end of the one year, Malis said it is up in the air.

“If the business community and town have a strong interest to make a change and get some new blood in here, then we would step aside gratefully and let someone else take it over but if we continue to do well together and attract tourists and have the support of people in town than I would like to keep it and work very hard to keep it,” he said. “For now let’s just worry about 2013 and have a good season.”